Was the aim of the bedroom tax always to shift debt from the government to benefit claimants?

The bedroom tax might be the clearest example of the coalition punishing the poor for the financial crisis.

The bedroom tax might be the clearest example of the coalition punishing the poor for the financial crisis

It was claimed by the government that the bedroom tax had two aims – to reduce spending on benefits and to help the 300,000 people living in overcrowded accommodation by incentivising those tenants ‘over occupying’ to move to smaller homes.

But the maths didn’t add up.

When the policy was first proposed, critics pointed out that there were not enough homes for the so-called ‘over occupiers’ to move to. There were only 85,000 one bedroom social properties available in England, and 180,000 social tenants “under-occupying” two-bedroom houses. That’s quite a large gap.

Hardly surprising then, that research carried out by the BBC a year after the tax was implemented showed that only 6 per cent of people affected by it have moved home. There are simply not the homes for them to move to.

Despite this, the Conservatives gleefully claimed a victory for the tax, saying that it saved the government the conveniently round figure of a million pounds per day.

As professor Rebecca Tunstall, director of the centre for housing policy at the University of York, told the New Statesman:

“There were two major aims to this policy – one was to encourage people to move, and the other was to save money for the government in housing benefit payments. But those two aims are mutually exclusive.”

The government saves money from the people who have no choice but to stay where they are.

And what happens when people with a low income have that income cut? They go into arrears on their rent.

According to the BBC, this is what’s happened to a third of tenants affected by the tax. The debt has been successfully shifted from the government to benefit claimants.

Could this have been the main aim all along?

Supporters of the bedroom tax certainly focused on the under-occupancy issue. Ian Duncan Smith, for example, pointed out how unfair it was on those who did not have a spare bedroom:

“It is unfair on taxpayers, it is unfair on those in over-crowded accommodation and it is unfair that one group of housing benefit tenants cannot have spare bedrooms and another group are subsidised.”

Yet it’s unlikely that the government did their housing sums wrong and genuinely believed the main outcome of the tax would be people moving home. It seems more likely that focusing on the ‘unfair’ behaviour of benefit claimants suited their rhetoric of vilifying a certain section of the general public.

Without discussing the possibility that an increase in homelessness caused by the tax could result in it saving the government no money at all, how ethical is it for a government to shift debt on to the general public?

There is a faint silver lining to this deplorable tax, however, and that is the creativity it has brought out in campaigners.

In North London, for example, one group of artists are protesting by putting on an exhibition inspired by the bedroom tax, hosted in a bedroom subject to the tax. The 27-year occupier is moving out for a week and will be exhibiting art along with other artists, all inspired by the tax. The exhibition will be free and also show short films on the housing shortage so that local people can visit and learn more about it.

It seems the bedroom tax might be the clearest example of the coalition government punishing the poor for the financial crisis, but there are always ways to fight back.

72 Responses to “Was the aim of the bedroom tax always to shift debt from the government to benefit claimants?”

  1. eireanne

    In my view this is the worst tax ever – even worse than the poll tax

    have a look at axe the bedroom tax
    http://eurofree3.wordpress.com/2013/10/14/axe-the-bedroom-tax/

  2. David Britten

    Why should any of us pay? The state’s financial mess is due to the bailout of criminal bankers, tax evasion and fraud by corporations and the super rich, and has little or nothing to do with benefit claimants, whose burden on the state is minimal by comparison.

  3. LB

    So which bank is running the state pension?

    Which bank is responsible for the civil service pensions?

  4. LB

    Perhaps the people who’ve received the money should pay?

    Banks. Lets see

    Emergency lending? All paid back, penal rates of interest. 35 bn profit booked. Money spent by the state already

    Taxes paid? 4-500 bn since the crash. Perhaps the state should give that back?

    Share losses. Yep. Gordon Brown lost money on share trading. Lets get him to pay. He’s dodging enough tax to cover a few seconds of spending.

    So on the burden on the state. I’m more worried about their burden on others. So how about working out what a family of 4 on welfare costs the state? Is it minimal?

    For a family of 4, here’s the analysis.

    Now for an average family of 4, we can get their welfare costs.

    http://www.entitledto.co.uk/ is the website to go to get accurate calculations

    They the following results.

    Final Tax Credit – 6051.70
    JSA – 0 [Trying to minimise the cost]
    Council Tax benefit 686.10 [Lowest band]
    Housing benefit 13,264.68 [Cheap part of London]
    Child benefit 1,770.60

    That comes to 21,773.08.

    Not included are

    Free school meals
    Funeral Grant
    NHS Low Income Scheme
    Home Improvements Grants
    Discretionary Housing Payment
    Warm Homes Discount

    On top.

    If you are claiming child benefit, you get entitlement for the state pension. 1/30 th for each year, for free. Cost of the state pension?

    You need an RPI linked annuity number to start.

    http://www.annuitybureau.co.uk/~/media/Files/TAB/Annuity%20Rates/TAB%20Website%20Annuity%20Rates%2001%2005%202014.ashx

    Closest is the Male 65, Female 62, joint life with a 50% cut on the first debt. That pays 3,092.76 of income per 100,000 of fund.

    So the BSP is 113.10 a week, or £5,881.20 a year. That means it costs the state 190,160.25 pounds. 1/30th of that is £6,338.67 a year.

    If you are on welfare, you also get the entitlement. For that sample family that goes on the cost.

    The NHS costs are here http://www.ukpublicspending.co.uk/

    132.6 bn on 63.7 million people.

    For the population http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Population

    £2,050 pounds per person per year. That’s for each of the four people.

    Education for the kids. Bit harder to get the costs.

    http://www.bbc.co.uk/news/education-12175480 says its between 1,500 and 33,000 (secondary) and 1,000 and 17,000 for primaries.

    http://www.bbc.co.uk/news/education-12175480

    The figures for London, to keep it consistent with the HB part.

    The secondary schools list is topped by Tower Hamlets (£8,058 on average per pupil), followed by Hackney (£7,962) and Lambeth (£7,207). Knowsley in Merseyside receives the lowest, (with £3,790), followed by Solihull (£4,445) and Swindon (£4,563).

    At primary level, the Isles of Scilly (£8,736), City of London (£7,401), and Tower Hamlets (£5,967) top the table, with South Gloucestershire (£3,328), Central Bedfordshire (£3,354) and Solihull (£3,432) at the bottom.

    6,000 seems a reasonable figure. Not the top end, nor the bottom.

    So the rest of the tax payers are forking out, or are on the hook, for

    £54,650.42 a year. Each and every year.

    All referenced, so you can check.

    In what way is that minimal? Perhaps you’re advocating more welfare cuts. Which bit of the above should the welfare claimant lose?

  5. TeannaB

    Cherry-picked figures to suit an ideological purpose. You are Ian Duncan Smith or Mike Denning. I claim my prize.

Comments are closed.